Netflix–Warner Bros. mega-merger faces political, industry hurdles

Streaming giant Netflix has emerged as the winner in a competitive battle to acquire Warner Bros. and competitor platform HBO, revealing a major agreement that could unite two leading streaming platforms with one of the world’s most influential traditional studios.

If finalized, the acquisition would significantly alter the structure of Hollywood during a turbulent period for the industry, as noted in an article by CNN.

The purchase would hand Netflix control over some of the entertainment industry's most valuable franchises such as Batman, Harry Potter, and Game of Thrones, while giving the streamer authority over a studio long associated with box office dominance. This includes oversight of a film operation that brought more moviegoers to US theatres this year than any other studio, despite Netflix’s historically limited interest in cinematic releases.

Warner Bros. Discovery also owns TNT Sports in the UK and Ireland, and Eurosport in Europe. Earlier this year, the company split into two divisions: one focused on streaming and studios—which Netflix aims to acquire—and another dedicated to global networks.

Netflix confirmed the sweeping agreement with Warner Bros. Discovery on December 5, announcing plans to purchase the iconic studio and assets such as HBO Max for $72 billion, in addition to its debt.

Several major players competed for the deal, including Paramount Skydance and Comcast, which owns Universal Studios and Sky. The bidding could still reopen after the surprise decision, as Paramount had previously been viewed as the most likely buyer, reportedly seeking full control of the company.

The transaction also unfolds amid speculation over whether US President Donald Trump will intervene in the merger. He has previously praised Paramount Skydance backers Larry Ellison and David Ellison, major Republican donors behind the competing offer for Warner Bros. US regulators have not issued formal statements, but a senior Trump administration official told CNBC that the government views Netflix’s offer with "heavy scepticism".

Fears over monopolization of streaming

The central hurdle now lies with regulators in both the US and Europe, who must approve the massive deal, a process expected to face serious scrutiny. Lawmakers in Washington, from both political parties, have already expressed opposition, warning that the acquisition could reduce consumer choice and raise prices.

Netflix co-CEO Ted Sarandos has maintained confidence in the path forward, saying the company—which would owe Warner Bros. $5.8 billion if the purchase collapses—remains "highly confident" it will gain approval.

Jonathan Barnett, professor at the University of Southern California Gould School of Law, noted that regulatory outcomes may depend on how authorities define market competition. If they focus solely on streaming, Netflix’s expanded market share could trigger major concerns. But if the definition broadens to include broadcast TV, cable networks, and platforms like YouTube, then "the concentration concerns become less and less", Barnett said.

Rebecca Haw Allensworth, a professor at Vanderbilt Law School, argued that under normal circumstances, a deal of this size would be a "clear-cut case for a challenge", typically leading regulators to negotiate stronger protections for consumers. She expressed concern that the Trump administration’s stance could be influenced by political considerations regarding diversity or media bias, as seen in other corporate cases.

Warner Bros., responsible for cinematic landmarks like Casablanca, Gone with the Wind, Terminator, and The Last Samurai, has long symbolized Hollywood’s golden age. Its sale demonstrates how the industry has shifted, as its future increasingly appears to be "all-streaming".

Netflix has pledged to continue releasing films in theaters, an approach that aligns with acquiring the lucrative DC superhero catalogue, which has a strong theatrical track record. However, skepticism remains among industry figures. Director James Cameron, reacting before the official announcement, warned that the outcome could become a "disaster" for Hollywood.

By Nazrin Sadigova